Futures Flat; BofA, CenterPoint Energy Lead S&P

By Sam Mamudi

Futures for the leading stock indexes were essentially flat this morning, ahead of Friday’s opening bell. When the session begins, the Dow will be looking to make it 11 straight days of gains.

Shares of Bank of America (BAC) are among the big winners this morning, rising nearly 4% after the Federal Reserve approved the bank’s $10.5 billion share buyback program.

JPMorgan Chase (JPM) was told it would have to resubmit its plans after only receiving conditional Fed approval:

While the Fed indicated that J.P. Morgan, the nation’s largest bank by assets, and Goldman could likely withstand a sharp economic downturn with adequate capital cushions, a senior Fed official said there were concerns about the banks’ ability to adequately estimate losses in the face of severe economic event.

J.P. Morgan said it had received approval to buy back $6 billion of common stock and raise its quarterly dividend by 8 cents to 38 cents a share, beginning in the second quarter. But the company warned that it may have to reduce those disbursements after it submits an additional capital plan by the end of the third quarter.

Also going against JPMorgan this morning is a damning Senate report into the trading losses caused by the so-called London whale, specifically criticisms aimed at CEO Jamie Dimon.

Dimon misled investors and dodged regulators as losses escalated on a “monstrous” derivatives bet, according to a 301-page report by the Senate Permanent Subcommittee on Investigations. The bank “mischaracterized high-risk trading as hedging,” and withheld key information from its primary regulator, sometimes at Dimon’s behest, investigators found. Managers manipulated risk models and pressured traders to overvalue their positions in an effort to hide growing losses.

The bank’s stock is down about 2%.

BB&T (BBT) fared even worse, with the Fed denying its new capital plans. Though the bank went into full spin mode in the wake of the results, investors don’t seem convinced, with BB&T’s stock down more than 3% this morning. Here’s part of the statement:

BB&T today announced that the Board of Governors of the Federal Reserve System (Fed) did not object to the company’s continuation in future quarters of its first quarter dividend of $.23 per share…

The Fed informed BB&T that it objects to certain other elements of its capital plan. However, based on the quantitative results of the stress test, BB&T does not believe these objections are related to the company’s capital strength, earnings power or financial condition.

The biggest gainer on the Standard & Poor’s 500 index this morning is CenterPoint Energy (CNP), up 6.6% after it said late yesterday that it is joining with OGE Energy (OGE) and ArcLight Capital Partners to create a new master limited partnership:

Centerpoint, a Houston-based utility owner, and OGE Energy, an Oklahoma City-based utility owner, plan an initial public offering of equity in the partnership after the transaction closes, which is expected in the second or third quarter of 2013, according to a statement.

Centerpoint will have a 59 percent interest in the partnership, OGE Energy will have a 28 percent interest and ArcLight, a private equity investor, will hold a 13 percent interest, the companies said today in a joint statement. Centerpoint will hold a 40 percent interest and OGE Energy will have a 60 percent interest in distribution payments made by the new company to the general partner.

MLPs, their pros and cons and which ones are most favored, were the subject of a Barron’s cover story late last month.

The largest decliner on the broader market this morning is clothing retailer Aeropostale (ARO), which is down more than 5.5% after delivering weak quarterly earnings and a poor outlook.

Sales fell 1 percent to $797.7 million for the quarter that included the holiday season, while same-store sales fell 8 percent.

The company expects the pressure to slash prices to clear shelves of unsold merchandise to continue, and forecast a first-quarter loss of 15 to 20 cents per share. On a conference call, an executive said that assumed a double-digit comparable sales decline.

Wall Street analysts were expecting a profit of 8 cents per share, according to Thomson Reuters I/B/E/S.

About Stocks To Watch

Earnings reports, corporate strategies and analyst insights are all part of what moves stocks, and they’re all covered by the Stocks to Watch blog. We also look at macro issues, investor sentiments and hidden trends that are affecting the market. Stocks to Watch gives you the full picture of the U.S. stock markets, all day long.

The blog is written by Ben Levisohn, a former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek.